In his pioneering work Das Recht des Warenkaufs, Ernst Rabel undertook a comparative analysis of sales laws with a view to postulating common global rules on the sale of goods. Following a review
of the concept of 'lack of conformity' of goods [2] to the contract in different western legal systems, Rabel reached the following conclusion:[3]

The background to Rabel's conclusion was that the legal systems which he had studied had differing views about the legal conditions for a buyer to claim that the goods lack conformity to the contract.[4]
Thus, he found that some legal systems considered lack of conformity from a standpoint which has its roots in the Roman law principle of tale quale, where it is assumed that the goods are 'bought as seen' (also referred to as the principle of caveat emptor[5]), according to which there is an assumption that the buyer bears the risk if it appears that the goods do not conform to the contract.[6] Other legal systems had developed more balanced rules, where the assumption was that the seller is responsible for defects in the goods, including those based on explicit or implicit guarantees about the quality of the goods (and the principle of caveat venditor which is derived from this), while yet other legal systems have operated without codified definitions of lack of conformity.[7]Cf. also Andreas Schwartze:

Here the assessment of lack of conformity was developed in the practice of the courts and in theory
on the basis of principles which were largely similar to those known from the other legal systems with
codified rules for assessing lack of conformity.

On this basis, Rabel recommended that an attempt should be made to work out a common definition
for lack of conformity of goods to the contract:

Among other things, it was on the basis of Rabel's work that the uniform sales laws, ULIS [9] and ULF [10]
were developed, and these later led to the adoption of the CISG in 1980.[11] On the basis of Rabel's
recommendations, it was decided to include a rule in the uniform sales laws and in the CISG on the
conformity of the goods to the contract. The rule in Article 35 of the CISG is as follows:

Article 35

(1) The seller must deliver goods which are of the quantity, quality and description required by
the contract and which are contained or packaged in the manner required by the contract.

(2) Except where the parties have agreed otherwise, the goods do not conform with the contract
unless they:
(a) are fit for the purposes for which goods of the same description would ordinarily be used;
(b) are fit for any particular purpose expressly or impliedly made known to the seller at the time
of the conclusion of the contract, except where the circumstances show that the buyer did not
rely, or that it was unreasonable for him to rely, on the seller's skill and judgement;
(c) possess the qualities of goods which the seller has held out to the buyer as a sample or model;
(d) are contained or packaged in the manner usual for such goods or, where there is no such
manner, in a manner adequate to preserve and protect the goods.

(3) The seller is not liable under subparagraphs (a) to (d) of the preceding paragraph for any lack
of conformity of the goods if at the time of the conclusion of the contract the buyer knew or
could not have been unaware of such lack of conformity.

In recent years, the CISG in general and the provisions on lack of conformity in Article 35 in
particular
have prompted a number of changes to national sale of goods laws. More recently there have been
changes to the EU law on the sale of goods, following the adoption of a directive on the sale of
consumer goods which was also strongly influenced by the CISG rules on lack of conformity.[12] The
focus of this article on the provisions of Article 35 on the conformity of goods to the terms of a sales
contract also leads to a focus on the inspiration for changes made to sale of goods laws in a number
of legal systems, including EU law.

The purpose of this article is twofold: namely to analyse the battle between the principles of caveat venditor and caveat emptor and to analyse the relationship between Article 35 and the contract law
as
background law and as a competing set of rules. The aim is to illustrate whether or not Article 35
creates uniform rules on the conformity of goods in international sales. The article first discusses the
basic principles of Article 35. Then, the relationship to supplementary and competing rules is
discussed. The article then analyses how theory and practice generally have seen Article 35 as an independent
concept. Following this, the battle between caveat venditor and caveat emptor is described
through an analysis of Art. 35(2)(a) and Article 35(3). Finally, the paper ends up concluding that
the
Article 35 operates in an area of tension between differing doctrines and rules of the law of
obligations,
so there is sometimes conflict and thus uncertainty about the application of Article 35. This is
unquestionably a problem to achieving uniform application of the provision.

Article 35 is founded on the basic principle that the seller has a duty to deliver the goods required
by the contract. The premises of this argument are exoteric, evident and universal: the characteristics
of the goods are presumed to lie within the sphere of influence of the seller,[13] and the seller is presumed
to know more about the characteristics of the goods than the buyer who has paid for the goods and is therefore entitled to receive his part of the bargain (quid pro quo). In this respect the starting position
of the Convention is caveat venditor, which has been the general tendency in the law on the sale of
goods since the end of the 19th century.[14]

This is a natural solution in international sales law, where there are distances and where the buyer
often enters into an agreement without having had previous sight of the goods. As distinct from the
Roman law of the market, where the prime rule was caveat emptor, trading at a distance means that
the
buyer must rely to a higher degree on the information in the contract and on the seller's information
about the goods. Furthermore, the seller is usually the one who knows about the goods. The seller
becomes the "eyes" of the buyer, so that the nature of the goods is overwhelmingly a matter within
the sphere of influence of the seller. The seller must answer for the information he gives and what is agreed.

The conclusion is that the seller -- as a starting point -- must effectively carry the risk of the goods
conforming to the contract, and that the buyer can, with justification, expect to receive delivery
which conforms to the contract.[15]

The principle underlying Article 35 is an ethical-juridical axiom,[16] and constitutes an important
element of the guarantee of trade.[17] If the premises of the argument are changed, for example if the
buyer supplies materials for the manufacture of the goods, if the buyer plays a role in selecting the
goods or materials for them, or if the buyer's knowledge and skills are superior to the sellers,[18] then
the validity of the argument is weakened, and the allocation of risk changes, since there are now
elements which are outside the seller's sphere of influence which can affect the assessment of lack of
conformity to the contract.[19] The conformity of the goods to the contract now falls within the buyer's
sphere of influence -- caveat emptor. This alternation between caveat venditor and caveat emptor is the
core of article 35 and -- in general -- in every assessment of the conformity of the goods.

Article 35 can therefore be considered as a rule in which the principles of caveat emptor and caveat venditor meet. It is only through a careful balancing of these principles that it is possible to decide
whether or not a good complies with the contractual obligations or not. It is the proposition of this
article that the principles of caveat emptor and caveat venditor, as expressed in Article 35, should to
a
large extent be assessed on the basis of which party's sphere of influence is more closely linked to the
conformity of the goods to the contract, and on the basis of a number of suggested presumptions. For
example, the starting point is that it is assumed that the seller should supply goods which are of the
description laid down in the contract, cf. Article 35(1), or are fit for the purposes for which goods
of
the same description would ordinarily be used, cf. Article 35(2)(a). If the goods do not meet these
standards, they do not comply with the contract. In other words, the starting point is the principle
of
caveat venditor. But what if there is a difference between the understanding of the terms in the
contract,
normal quality standards or fitness for purpose between the seller's country and the buyer's
country? In this case, is it assumed that the seller should supply goods which meet the standards in
the buyer's country or in the seller's country? Unless the solution follows from an interpretation of
the contract, this can only be decided if a choice is made between the principles of caveat emptor and
caveat venditor. It is the proposition of the present writer that the party with whose sphere of influence
thedisputed factors are judged to be more closely linked ought to be liable for ensuring that the goods comply withsuch contractual requirements.

If the Convention does not provide all the answers, then help can be sought elsewhere when making
a thorough apportionment of liability under the law of obligations. In such circumstances it may be
possible to apply both national rules and principles, but internationally recognised rules and principles,
for example UNIDROIT Principles (by the International Institute for the Unification of Private Law) or PECL (Principles of European Contract Law by the Commission on European Contract
Law, also known as the Lando-Commission) may be helpful in providing a truly international and
uniform solution.

There are also provisions which compete with Article 35, in particular the rules on validity. Since
Article 4 clearly states that the Convention -- unless otherwise expressly provided -- is not concerned
with the validity of a contract, national laws should apply. However, on certain occasions the rules
on
validity will overlap with the rules on lack of conformity, for example in cases of mistake. In other
words, there can be situations in which there are conflicts between the Convention and national law,
unless the Convention supersedes or absorbs the competing national rules. It is therefore not possible
to analyse the concept of lack of conformity in Article 35 without taking account of the fact that the
provision should be seen in the context both of general and of special contract law and the law of
obligations, under the Convention and outside it, just as Article 35 finds itself in competition with
such rules, for example national rules on validity. Since there is no general agreement on these
questions, due to the differing points of view on the priority of the Convention and its regulatory
scope, it is the second proposition of this article that Article 35 cannot be expected to lead to a fullyharmonised law before either the general contract law which lies behind it is harmonised, or the provisions
of theConvention are amended.

To conclude, in every case where Article 35 comes into play, this brings into focus the question of
contract law as background law to the Convention and as a competing legal regime, since a party will
be able to address the question of conformity of goods from a number of different angles:[21]

-

the formation of the contract (that the conditions concerning a specific characteristic "X" of the goods is actually in, or is not in the contract),[22]

-

the interpretation of the contract (that the conditions concerning the characteristics of the goods means "X" rather than "Y"), and

-

the validity of the contract (the party was misled, as he thought the quality was "X" when in fact it was "Y").

In this context it is likely that a party will rely on the rules of the Convention to support their
arguments but it is also possible that national rules will compete with the Convention rules and a
party will be able to rely on these in the alternative. To a great extent the rules on formation of
contract, interpretation and validity are the same in different jurisdictions, but there are still major differences, i.e. between the literal approaches to contract interpretation in common law and the
more liberal approach to contract interpretation in civil law.[23]

If the Convention can be said to govern a question exhaustively, or if Article 35 applies as a lexspecialis, then it cannot be assumed that there is scope for competing rules, though this is not
recognised
by everyone. In a jurisdiction in which there is a principle of exhaustion of rights, the contract law
rules on lack of conformity of goods will have priority over certain rules on validity, but this is not
recognised in all jurisdictions.[24] There does not seem to be a prospect for solving this conflict before
the underlying contract law is harmonised or the Convention rules are amended.[25] This means that
the parties still need to make a choice of law in order to avoid unpleasant surprises.

It should also be noted that there can be elements in the agreement which could trigger the
application
of other competing national laws, for example culpa in contrahendo or rules on product liability. According to the opinion of the present writer, if the Convention does not give an exhaustive
functionally
adequate solution, then national rules ought to apply. For example, Article 79 has been
referred to as a competing provision granting exemption from liability which could undermine the
seller's liability to pay compensation for defects in the goods. Honnold argues that if Article 79 were
applicable, this would undermine the seller's obligation to deliver goods which conform to the
contract,
cf. Article 35, since the courts would have to enter into complicated considerations of the
seller's and the third party's possibilities for taking into account any structural failure in the planning
or production process, etc.[26] In contrast to this, the prevailing view in continental European doctrine
is that Article 79 can be relied on in cases of defective delivery of goods.[27] There is thus nothing in
the
rules of the Convention, whether taken individually or collectively, which supports the view that the
seller will not be able to rely on Article 79 in cases of defective delivery.[28] In the practice of the
courts,
Article 79 is applied in cases of lack of conformity of goods to the contract.[29] However, some aspects
of the practice of the courts can be criticised for the use made of the provision, as Article 79 ought,
in general, to be applied relatively infrequently in connection with the delivery of defective goods.[30]

4.1. The conformity of goods according to the contract -- Article 35(1)

In general, courts have regarded favourably attempts to interpret Article 35(1) as an independent
concept which covers variances of quantity and quality, and the supply of totally different goods than
those agreed, as well as the way the goods are contained or packaged.

Thus, concepts and distinctions which are rooted in national laws and which are relevant to
evaluating
the conformity of goods to the contract are rejected. In assessing the conformity of goods to the
contract in accordance with Article 35, the theory rejects impractical distinctions between delays
and
short deliveries, and both theory and the practice of the courts reject the idea of giving independent
significance to special distinctions in national law between ordinary information and assurances and
guarantees, even though the existence of assurances or guarantees can be included in an assessment
under Article 35.[31] Although the overall conclusion is that the starting point is that Article 35
governs
cases of aliud pro alio, there is some difference between the decisions of the German FederalSupreme Court and the Austrian Supreme Court, as the German court left the door slightly ajar in
particularly gross cases of aliud.[32] Here, domestic rules on mistake might be allowed to govern the
case, and therefore the parties ought to take this into consideration in there contract.

The relevance of the concept of insignificant defects has been rejected both in theory and in practice,
[33] since any variance at all from the agreed description of the goods is assumed to mean that the
goods do not conform to the contract. The significance of the defect for the buyer is then decided
according to the rights of the buyer in the event of lack of conformity of the goods, and this will
typically involve compensation or a reduction in the price, although a minor defect will also amount
to a fundamental breach in some cases.

Furthermore, it is not relevant to distinguish between the container or packaging of goods and the
conformity of the goods to the contract, since the requirements for the containment and packaging
of the goods can be an integral part of the conformity of the goods to the contract under Article 35.

Finally, the review of practice and theory shows that the interpretation of what requirements can be
made of the goods, cf. Article 35(1), is decided on the basis of an interpretation of the agreement
between the parties, so that Articles 8 and 9 are actively considered.[34] National rules which compete
with Article 35, cf. Articles 8 and 9, give way to the Convention where the Convention rules give
guidance as to how a particular problem of law should be solved, cf. the ruling of the American
courts to disregard the parol evidence rule in favour of Article 8(3) in cases of lack of conformity
covered by Article 35(1).[35]

4.1.[a] Article 35(2)(a) -- fitness for ordinary purposes

The rule in Article 35(2)(a) on the fitness of the goods for their ordinary purposes is not an objective
legal standard, but a rule about the presumed intention of the parties which should be interpreted
on
the basis of all the relevant circumstances of the case, cf. Article 8 and Article 9.[36]

The starting point for assessing the ordinary use of the goods is the objective norm in the relevant
commercial sector.[37] Some writers think that, in such cases, the principle should be that the norms
in
the seller's state should apply.[38] Others think that such cases should be assessed according to the
norms in the buyer's state.[39] Yet others think that such general guidelines cannot be given, and that
it depends on the actual circumstances of each case as to whether the norms of the seller's, buyer's,
or
some entirely different state should apply.[40]

If it is assumed that norms for the ordinary purposes of goods are often not defined in international trade, it must [be] right to refrain from laying down absolute rules about which norms should be used.

Nevertheless, there can be situations in which it is not possible, on the basis of the interpretation of
the agreement between the parties, to determine which norms the parties can be assumed to have
agreed upon for assessing the fitness of the goods for their ordinary purposes. In such cases, the
decision will depend on which party ought to bear the risk, if the goods cannot be used for what that
party considers to be their ordinary use.

In other words, in such cases there will be a presumptive rule to decide whether the starting point
is
that the norm in the seller's or the buyer's state, or some other state, should be decisive, since there
should in any case be full apportioning of all the risks of the obligations arising out of the transaction
between the buyer and the seller.

Here, the prevailing view, both in theory and in practice, is that the seller cannot be assumed to
know
of the norms in the buyer's state.[41] This is in line with the principle that it is not assumed that it is
within the seller's sphere of influence to know about the norms in the buyer's state. This can also be
justified on economic grounds, since the buyer can obtain the relevant information more effectively
and cheaply than the seller can.[42]

This principle was laid down by the German Federal Supreme Court in its decision of 8th March 1995
(the Mussels case), where a Swiss seller and a German buyer had entered into an agreement for the
sale of New Zealand mussels, which should be delivered to Germany for onward sale. It was found
that the mussels had such cadmium levels that the local German public health authorities could not
declare that the mussels were safe to eat, since they possibly exceeded the recommended, but not
binding, legal thresholds for meat products (the so-called ZEBS standard). Because of this, the
authorities
requested further samples of the goods, in addition to the routine samples which had been
taken when the goods arrived in Germany.

Even though the sale and consumption of the mussels had nor been prohibited, so the mussels were
still considered to be edible, the buyer demanded that the contract should be declared void, as there
were now no German retailers or consumers who would buy the mussels.

The German Federal Supreme Court stated that, as a starting point, the conformity of the goods to
the
contract should be assessed on the basis of the agreement between the parties, cf. Article 35(1).
Nothing had been agreed about the need for the goods to comply with the German standards.[43] Even
though the goods had been delivered to Germany, and the seller knew that the goods should be sold
there, this did not mean it was implicitly agreed that the goods should be capable of being retailed,
still less that they should comply with special German rules.[44] In the absence of agreement, the
conformity of the goods to the contract must be judged according to Article 35(2)(a) and Article
35(2)(b).

By way of introduction, the court stated that it was not necessary to decide whether the ordinary use
of the goods required them to be of average quality or merely of merchantable quality, since it had
not been shown that the mussels delivered had a higher cadmium level than the average for mussels
in New Zealand.[45]

The court then stated that, even on the basis that the goods should be merchantable, meaning that
they should be capable of being sold on, there was not a lack of conformity to the contract, since the
seller could not be expected to know of the public health regulations in the buyer's or consumers'
state.[46]

In the view of the court, it was not necessary to decide how far the compliance of the goods to the
requirements of public law was, in principle, governed either by Article 35(2)(a) or by Article
35(2)(b).
It was thus not necessary to express a view on the debate between legal writers about whether the
standard in the seller's state will always be decisive, so the conformity of the goods to public law
requirements is not a question of the goods' fitness for ordinary purposes, cf. Article 35(2)(a), but
should, where relevant, be decided under the provisions of Article 35(2)(b) on particular purposes.

In any case, the goods need only satisfy the requirements in the buyer's state, where corresponding
rules apply in the seller's state, if the buyer has made the seller aware of such rules, in which case the
matter would probably be decided under Article 35(2)(b), or if, due to special circumstances, the
seller knew or ought to have known of the rules in the buyer's state. However, the court found that
none of these circumstances applied in this case.[47]

Thus, it was not shown that corresponding public health provisions applied in the seller's state,
Switzerland. Nor was the agreement about where the goods should be delivered and the final
destination
of the goods a sufficient condition under Article 35(2)(a) or Article 35(2)(b), even if it could be
considered an indication that the buyer wanted to retail the goods in Germany, since the seller could
not be expected to know the frequently opaque public regulations or administrative practice in the
buyer's state, any more than the buyer should be expected to have the seller's professional knowledge
on matters which concerned him. It was most natural for the buyer to know the regulations in his
own state, so the buyer should have made the seller aware of these regulations. This applied not least
to the case before the court, which concerned not so much the cadmium levels for mussels, but the
fact that the local German public health authorities applied the regulations for meat analogously to
fish,[48] which was not a widespread practice even in Germany, just as there was doubt about what
sanctions the authorities were authorised to impose.

Whether the decision would have been different if, for example, the seller knew of the public health
regulations in the buyer's state, or if the buyer could have assumed that the seller either knew or
ought to have known of these regulations, perhaps because

-

the seller had a branch in the buyer's state,

-

the parties had had a long-term trading arrangement,

-

the seller had regularly exported to the buyer's state, or

-

the seller had marketed his goods in the buyer's state,

was irrelevant in this case, as the buyer had not asserted any of these circumstances.[49]

Finally, it was not at the seller's risk that the goods were confiscated, since the confiscation was made
under the German public law rules which, as argued above, were a matter for which the buyer bore
the risk.

As stated by the German Federal Supreme Court, the starting position can be derogated from if
information about the norms of the destination state are brought within the seller's sphere of
influence,
for example if the seller knows about the rules, if the parties have previously traded together
and the seller knows of the buyer's expectations, or if the seller has marketed the goods in the seller's
country. This was the case in the decision of the Grenoble Court of Appeal of 13th September 1995,
where, on the basis of the negotiations between the parties etc., the seller of parmesan cheese could
not have been unaware that the goods should be capable of being sold in France, and therefore had
to satisfy the French requirements as to product declarations and 'best before' date as well as in the
decision from the US District Court, E.D. of Louisiana, 17th May 1999, and the principles in the Mussels case now seems to have widespread acceptance, see also the Austrian Supreme Court of 13th April 2000, making the judgement of the German Federal Supreme Court ipso facto stare decisis.[50]

4.2. The limited caveat emptor principle in Art. 35(3)

The idea behind this provision is that the buyer's expectations will not be disappointed if he is aware
of some defect, so the buyer ought not to enjoy the protection of the relatively "buyer-friendly" rules
of Article 35(2).[51] Article 35(3) is also an expression of a certain relaxation of the burden of evidence
for the seller, who need not prove the buyer's actual awareness of some defect, which can often be
very difficult to prove, but merely that the buyer could not have been unaware of the defect.[52]

The fact that the seller is not liable not only means that the buyer cannot hold the seller responsible
for the payment of compensation, but that all the remedies of the buyer lapse, for example, the right
to revoke the contract, the right to have the goods repaired, and the right to a proportionate
reduction
in the price.[53] Compared with ULIS Article 36, samples and models are now also covered by the
seller's exemption from liability under Article 35(3).[54] The main area where this provision applies is
in connection with the sale of specific goods, for example, second-hand machines,[55] but the provision
can apply to all kinds of sales covered by the Convention, including goods manufactured to the order
of the buyer, cf. Article 3(1), and sales where a subordinate part of the sales contract consists in
supplying labour or other services, cf. Article 3(2).[56]

As will be seen in the following review of this provision, it expresses a limited caveat emptor rule.[57]
According to its clear wording and its antecedents, Article 35(3) only covers cases that are covered
by
Articles 35(2)(a) to (d). If the seller delivers goods and the buyer knew or could not have been
unaware
that they were not fit for their usual purposes, or for the particular purpose of the buyer, or did
not possess the qualities of a sample or model, or were not contained or packaged in a usual or
adequate manner, then the seller is not liable.

At the diplomatic conference in Vienna, Norway proposed that Article 35(3) should also refer to
Article 35(1), but this was rejected by a majority of the delegates. This is also expressed in the
SecretariatCommentary, though it only refers to cases where the requirements are expressly stated in the
agreement.[58]

This means that an analogous or expanded interpretation of the provision so as to apply it to Article
35(1) seems in principle to be ruled out,[59] at least where the requirements for the goods are explicitly
stated in the agreement between the parties.

The background for this restriction in relation to Article 35(1) is the view that a buyer out to be able
to rely on what the parties have agreed. Therefore, the starting point is that the buyer can assume
that
the seller will make good any defects if there is any discrepancy between the contract and the goods
inspected, cf. in more detail below.[60]

The presumptive rule in Article 35(3) must mean that it is the seller who must, in the first instance,
show that the parties have agreed that the goods shall a different quality than that stated (in
practice,
explicitly) in the agreement; in other words, the fact that the buyer knew of or could not have been
unaware of the defect, and that those parts of the agreement which conflict with this cannot be
relied
on by the buyer. If this were not the case, and if there were a reference to Article 35(1) in Article
35(3), the provision could support the view that the seller could argue that the buyer had, de facto,
accepted that the goods should be delivered with the defects in question, merely by showing that the
goods were defective when they were examined by the buyer, or that the buyer knew that the goods
did not conform to the contract on the basis of other information.[61]

However, this argument is somewhat weakened by the argument that Articles 35(2)(a) to (d) are
largely an expression of rules of contractual interpretation which do not, in principle, need to be
stated, but can be contained in Article 35(1).[62]

In any event, the fact that there is not a reference to Article 35(1) in Article 35(3) gives some
protection
to the buyer. This means that the buyer is entitled to expect that the goods will conform to the
agreement, in practice the written agreement, and that any variance from what should apply under
the agreement and under Article 35(1) will be made good by the seller prior to delivering the goods
to the buyer.[63] This applies regardless of whether the buyer knows of a defect, if it is agreed [64] that the
seller shall deliver the goods without the defects.[65]

The principle that Article 35(3) does not apply in connection with Article 35(1) can also be said to
apply under the general rules of contractual interpretation. Under the general rules of priority, the
parties must be assumed to have expressed their wishes in their written agreement. If the seller has
drafted the terms of the contract, then any lack of clarity will be construed against him.

An example of this is the situation in which the buyer, either prior to entering into an agreement or
in connection with the agreement, examines a construction vehicle which is quite obviously missing
a wheel. Immediately afterwards, the buyer sends his order, to which he adds that he expects the
vehicle to be delivered in a state in which it is "ready to drive". The seller accepts the order by
sending
the vehicle to the buyer, but without it being ready to drive. At no point have the parties discussed
the
missing wheel.

The fact that the construction vehicle was missing a wheel effectively means that it was not fit for
the
purpose for which goods of that description are ordinarily used, since it could not be driven.
However,
Article 35(2)(a) is not applicable, since the goods have been described as being expected to be
"ready to drive," cf. Article 35(1).

In such a situation the assumption under Article 35(1), cf. Article 35(3), is that the buyer is entitled
to have a vehicle delivered which is ready to drive, and thus with all its wheels, since this is clearly
expressed in the agreement. The fact that the buyer knew from his examination of the goods, or
could not have been unaware, that at the time of the entering into the agreement, the vehicle was
not
in fact ready to drive, cannot justify exempting the seller from liability under Article 35(3).

The fact that the seller cannot rely on the provisions of Article 35(3) does not mean that he cannot
rely in the provisions of Article 35(1). Thus, under Article 35(1), which is the primary rule in Article
35, the seller has the possibility of showing that, despite the wording of the written agreement, the
parties have otherwise agreed that the vehicle should be delivered as seen, or that the buyer could
not
have been unaware that the goods were not as described in the agreement.[66] For example, this may
be
supported by witness statements or on the basis of the practice or usage between the parties, cf.
Articles 8 and 9.

Schlechtriem gives another example of this dichotomy, where a buyer has examined a machine which,
on the basis of its construction and the kind of steel plates which can be used by the machine in
production, can only produce steel wire up to a thickness of 1mm, but where the contract states that
the machine can produce steel wire up to a thickness of 2mm. In Schlechtriem's view, it is an open
question whether the buyer will be able to hold the seller liable. According to Schlechtriem, this will
depend on the facts of the case, cf. Article 8(3).[67]

The evaluation of these cases could thus depend on whether the seller could make good the defect
relatively easily, or whether this would require extensive and expensive changes to the goods before
they could live up to the specifications of the buyer.[68] In the example with the construction vehicle,
this would typically be to the advantage of the buyer, but in the example with the wire drawing
machine, this would be to the advantage of the seller. It would seem more reasonable to focus on the
price of the goods, since this can indicate whether the buyer can expect the quality of the goods to
be
brought up to the level expressed in the agreement or not. In Schlechtriem's example, this could also
follow from the minimum rule, since the seller cannot be presumed to have entered into a contract
which results in extraordinary costs for him. Reference can also be made to the principle of
equivalence
and thus to interpretation on the basis of reasonableness. This means that it does not seem
possible to fix a precise limit to when the provision in Article 35(3) applies, and the special
circumstances
under which a defect cannot form the basis of a claim, and when Article 35(1) applies, so
there is not, by definition, a defect since the buyer has merely received what has been agreed, cf.
Articles 8 and 9.[69] In other words, the application of Article 35(3) is conditional on it having been
established that there is a defect, which will not be the case if, under Article 35(1), it is found that
the
buyer has got what was agreed. This is a dichotomy which undermines the restriction of Article 35(3)
to apply only to cases covered by Article 35(2).[70]

See the decision of the Vaud Cantonal Appellate Court of 28th October 1997.[71] An oral agreement was
entered into for the sale of a second-hand bulldozer between an Italian seller and a Swiss buyer. The
buyer examined the bulldozer before the contract was entered into. It was agreed that the seller
should carry out 3 minor repairs before delivering the machine to the buyer. After the bulldozer had
been delivered, the buyer complained about other defects.

To start with, the court stated that, according to Article 35(1), a seller has a duty to deliver goods
in
accordance with the agreement between the parties. However, this was not the case if the buyer
knew
or could not have been unaware that the goods were defective, cf. Article 35(3). A buyer who buys
goods, despite their obvious defects, must be assumed to have accepted the goods as they are. This
is
also in accordance with the principle in Article 36 and the observance of good faith in international
trade.[72]

In this case, the seller had explicitly informed the buyer about the condition of the good, and the
buyer had also tested the bulldozer. Apart from the three repairs, there was no agreement that
anything
else should be done to the bulldozer, so the seller had delivered the goods as agreed, and in a
condition which was known to the buyer, so the seller had no further liability, cf. Article 35(1).

See also the decision of the Sion Cantonal Appellate Court of 29th June 1998, which concerned the sale
of sports clothing as part of a reciprocal distribution agreement between a Swiss buyer and an Italian
seller.[73] In its analysis of the conformity of the goods to the contract under Article 35(1), the court
emphasised that the buyer could not complain about defects of which he either knew or could not
have been unaware, cf. Article 35(3). A person who buys goods despite their obvious defects accepts
the goods as they are. The court also said that this is in accordance with the principle in Article 36
and the observance of good faith in international trade.[74]

Thus, both decisions directly link the application of Article 35(3) to Article 35(1), and refer to the
principle in Article 36 and the observance of good faith in international trade, even though this is
directly contrary to the wording of Article 35(3) and the antecedents of the provision and the view
of
it in theory.[75] However, it is not necessary to apply Article 35(3) if it has been agreed that the goods
shall have the quality in question, since Article 35(3) will not then be relevant. However, it can
sometimes be very difficult to establish what has been agreed. Neither of the cases referred to above
involved clear written requirements for the goods.

In this respect see the decision of the US District Court, Illinois, Eastern Division, of 28th October 1998. A Swedish seller offered aircraft spare parts for sale on an international database using specification
numbers. The buyer understood that each part had an individual number, while the seller intended
the parts to be offered under several different specification numbers. The buyer placed an order for
spare parts with the specification number 729640. In his order confirmation the seller had given the
same number, but did not think this was decisive as he had previously sent the buyer a fax in which
he stated that he could not be absolutely sure that the parts had the number given. He therefore sent
the buyer a fax giving the numbers which were on the spare parts, and encouraged the buyer to
check
that the spare parts corresponded to the specification numbers. Furthermore, the seller pointed out
that the buyer was a specialist in the trade in spare parts of this kind, but the seller was not. It was
therefore at the buyer's risk that he had not investigated the spare parts in more detail prior to buying
them. In refusing to give a preliminary ruling, the court said that in deciding whether the goods
conformed to the contract or not, attention should be paid not only to the statement of the
specification
number in the order and order confirmation, but also to the intentions of the parties, cf. Article
8(1). In this connection, all the relevant circumstances of the case should be taken into account,
including the negotiations between the parties, cf. Article 8(3). The court thus rejected the
application
of the parol evidence rule.

This decision also illustrates the connection between Article 35(1) and Article 35(3). The seller had
clearly listed the goods with the specification number in the contract. According to a restrictive
theory, Article 35(3) does not apply, but this presupposes that there is a defect. There will not be a
defect if it has been agreed that the seller cannot guarantee that the spare parts have the given
number,
or that the buyer accepts the risk of this. This shows that this question is closely linked to
whether the seller has given a guarantee or assurance of the description or quality of the goods. It
also
shows that the application of Article 35(3) may not exclude the use of certain elements of
contractual
interpretation, cf. Article 8(3), since otherwise Article 35(3) would be a de facto parol evidence rule.

Unless it is clear from the agreement that the buyer can expect the goods to be free from defects
upon
delivery, a buyer who insists on enforcing the written contract, even though he knew that the goods
were not free from defects, will not be entitled to a remedy, cf. the general principles of good faith,
venire factum contra proprium[76] and the observance of good faith in international trade.[77]

As stated, it is also possible that the buyer may not claim that the goods are defective if they are in
accordance with the practice or usage of the parties, for example if the seller has usually sold goods
to
the buyer which have been defective without the buyer objecting, or if, purely on the basis of the
price
of the goods, the buyer should expect to receive defective goods.[78]

However, the most simple solution is to conclude that the condition of the goods, as known to the
buyer, should be the basis for defining the agreement between the parties, cf. Article 35(1).[79]

In this connection, see the decision of the Tribunal of International Commercial Arbitration at theRussian Federation Chamber of Commerce, of 22nd January 1997.[80] An agreement was entered into
between a German seller and a Russian buyer for the sale of 300 tons of butter. At least, that
was what the buyer understood. In the pre-contractual negotiations the butter was described as
"table butter 82% fat", and in the seller's invoices as "animal fat butter". However, the seller
was not able to procure Belgian butter, so he wrote to the buyer saying that he would instead
supply "absolutely equivalent English butter". In the accompanying specification the goods
were stated to be "Pura sub butter, 80% fat content, 05-07 salt content". The buyer accepted
this offer.

Upon the arrival of the goods in Russia, the obligatory certificate of quality had to be obtained.
The buyer obtained a report from the certifying institute in Russia. From this appeared that the
goods were in fact margarine ("Pura sub butter" corresponded to "domestic margarine of
standard quality"), and that under the Russian public health rules there the level of lead in the
butter was higher than permitted, so the obligatory certificate of quality could not be issued.

The buyer then rejected the goods on the grounds that they did not conform to the contract,
and claimed compensation corresponding to the difference in price between margarine and
butter. The seller rejected the buyer's claim "Pura sub butter" had been sold, and because the
seller did not believe that the finding of the certifying institute should be decisive, since tests
made in Germany did not show too high a level of lead.

The arbitration tribunal started by stating that, by accepting the offer of the seller, despite the
different description of the goods, the buyer had accepted delivery of margarine, cf. Article 35.
Since the buyer had not asked for a reduction of the price in this connection, the buyer could
not subsequently claim such a reduction.[81]

The contract did not provide for how certificates of quality required by law should be obtained.
According to the rules in the buyer's country, the buyer could obtain a statement from an
expert from the local certifying authority. Since the tribunal did not have any reason to doubt
the conclusion of the report, the seller's claim for compensation for the costs of the buyer's
rejection of the goods was dismissed, since the buyer was unable to accept delivery for reasons
which were beyond his control, cf. Article 74.

This decision is a good illustration of the close connection between a decision about whether the
parties have agreed on the specification of the goods, and the question of whether, if agreement
has not been made on the specific point, the buyer knew or could not have been unaware of the
defect. In the UNILEX database the decision is listed under Article 35(3), but strangely enough,
not under Article 35(1).

An explanation for this can be that there is nevertheless some doubt about whether it was agreed
that butter should have been delivered. The great majority of the written material points towards
the conclusion that the goods should have been butter. The specification of the goods was
decisive. Normally this follows from the ordinary rules of interpretation, cf. the rule of priority,
but in this case the specification of the goods effectively meant that the primary description of
the goods in the contract (butter) was changed to something totally different (margarine). This
somewhat undermines the application of the rule of priority. At the same time, the buyer
appeared to pay the price for butter, which ought also to have been considered relevant to the
interpretation, cf. the minimum rule. Finally, the status of the parties can be relevant, and this is
not referred to in the report of the case.[82]

If it can be shown that the buyer knew or could not have been unaware of some lack of conformity
of
the goods to the contract, the assumption is that the seller will be exempt from liability. However,
there is an exception to this where the seller has deliberately and in bad faith kept quiet about a
defect
which was known to him, since even a buyer who is grossly negligent is more deserving of protection
that a seller who acts in bad faith. In such cases, the seller cannot rely on the buyer's acceptance of
the
goods as being in conformity with contract, cf. the principle of the observance of good faith in
international trade, cf. Article 7(1), as well as the principle in Article 40 that the seller is not entitled
to rely on the provisions of articles 38 and 39 if the lack of conformity relates to facts of which he
knew or could not have been unaware, cf. Article 7(2).[83]

This principle is clearly established in the decision of the Cologne Provincial Court of Appeal of 21st
May 1996, on the sale of a car which it appeared had a higher mileage than shown in the
contract between the seller and buyer and than shown on the car's odometer. Also, the car had
initially been registered in 1990, and not, as stated in the contract, in 1992.

After having established that the goods did not conform to the contract in accordance with
Article 35(1), the court held that the seller could not have been unaware that the car had been
registered earlier than was shown in the contract, and that it must have been driven further
than shown on the odometer.

The seller's claim that the buyer could not have been unaware that the car was registered in
1990, as the buyer's wife had been informed of this, so that the buyer could not make a claim
to this effect, cf. Article 35(3), was rejected by the court, on the grounds that even a very
negligent buyer deserves more protection than a fraudulent seller. The court stated that this
was in accordance with the principle in Article 40, in connection with Article 7(1).[84]

In this case, an objection to the validity and revocation of the contract would not be relevant, since
the car had been sold on, and the buyer had an interest in obtaining a remedy in the form of
compensation,
as he had already paid out compensation to the subsequent buyer of the car. The seller had to
have acted in a culpable manner for compensation to be payable. However, if the buyer has positive
knowledge of the defect, he cannot benefit from this protection, as the seller will have been able to
rely on the seller's acceptance of the goods.

The principle was also laid down in the decision of the Arbitration Institute of the Stockholm Chamber
ofCommerce, 5th June 1998, which stated that a seller cannot rely on the provisions of Articles 38 and
39, cf. the principle in Article 40 which applies as a general principle, cf. Article 7(1), regardless of
whether there was a lack of conformity of the goods to the contract according to Article 35, or as the
result of a contractual guarantee given by the seller.

If the seller has given a guarantee or assurance to the buyer that the goods are without defects, the
assumption is that the buyer will be able to base a claim on any defects, regardless of whether the
buyer could not have been unaware of the defects.[85] Here, the caveat venditor seems to supersede the caveat emptor.

As stated in the beginning of this article, the assessment of the lack of conformity of goods to the
contract is not an independent legal category, but is part of the law of contract. Article 35 is an
attempt to express the contract law principles on the assessment of lack of conformity, and in its
provisions the principle of caveat venditor confronts the principle of caveat emptor.

As also stated, the principles of caveat venditor and caveat emptor, as expressed in Article 35, should
be
considered mainly on the basis of which party's sphere of influence is more closely linked to the
conformity of the goods to the contract. This leads to proposals for a number of presumptive rules.

The party, whose sphere of influence lies closest to disputed circumstances which are relevant to the
conformity of the goods to the contract, ought to bear the risk if, in respect of these circumstances,
the goods do not (allegedly) conform to the contract.

The review of the practice of the courts and of legal theory also shows that the assessment of lack
of
conformity to the contract under Article 35 requires a balance to be struck between the principles
of
caveat venditor and caveat emptor, as expressed in Article 35 and in general contractual principles.
Where Article 35 does not give any direct guidance, the courts fall back on consideration of the
relevant sphere of influence, which can also be seen as an expression of reasonableness or of economicconsiderations. Thus, the assumption is that the norm in the seller's country shall form the basis for
judging what is a customary purpose, or a particular purpose or the usual manner for containers and
packaging. These principles find strong support in the decision of the German Federal Supreme Court
of 8th March 1995, which has been widely accepted both in practice and in theory.

There are a number of exceptions to this rule which are also expressions of the concept of the sphere
of influence, for example if the seller is aware of the norms which apply in the destination state of the
goods, regularly makes exports there, or markets his goods to that country etc., just as the generally
recognised principles of contractual interpretation apply. Laying down such assumptions, and
exceptions
to them, affects the burden of proof, as the buyer must show that the seller knew or could not
have been unaware of the norm in the destination state, i.e., that the relevant elements were within
the seller's sphere of influence.

It is also pointed out that there are a number of rules which compete with Article 35, especially rules
on contractual validity. Since the Convention does not, in general, govern questions of validity of
contracts, the assumption is that national law should apply to such cases. However, in some cases
the
rules on validity overlap with the rules on lack of conformity, for example where one or other of the
parties has been misled. This means that there is potential conflict between the Convention and
national laws, unless the Convention displaces the competing national rules.

This means that it is not possible to analyse the concept of lack of conformity contained in Article
35
without at the same time recognising that the provisions should be seen in the context of the rules
of
general contract law, both under the Convention and outside it, and that Article 35 is in competition
with such rules, for example national rules on the validity of contracts.

Since there is not a unanimous view on these questions, due to differing views on the priority to be
given to the Convention and the scope of its regulatory powers, the second thesis of this article was
that Article 35 cannot be expected to lead to fully uniform law, cf. Article 7, before the law of
contract
which lies behind it has been harmonised or before the rules of the Convention have been amended. Whether this will happen is a matter of legal policy.

It has also been seen that a restrictive interpretation has been used, especially on the question of how
far the principle of the exhaustion of rights should apply, or whether national rules on the validity
of
contracts can be asserted in competition with Article 35. These are dichotomies which cannot only
be solved by looking for a functionally adequate solution in the Convention, since there is not even
agreement within individual national legal systems about how to solve such problems.

Therefore, even though a dynamic interpretation is chosen, it must be recognised that there are
questions to which answers cannot be found on the basis of lege lata (existing law), but which depend
on statements of legal policy.

Overall it can be concluded that Article 35 amounts to a codification of sale of goods principles
which can also be seen as an expression of the general, internationally recognised principles of the
law of obligations. These principles radiate like ripples through water in sale of goods laws, and from
there through the general law of obligations.

At the same time, the practice of the courts and the arguments of legal theorists show that the
Article
35 operates in an area of tension between differing doctrines and rules of the law of obligations, so
there is sometimes conflict and thus uncertainty about the application of Article 35. This is
unquestionably
a problem to achieving uniform application of the provisions.

This automatically puts a focus on the need for the harmonisation of contract law or a revision of the
Convention. This is illustrated by the fact that an informal body has now been set up which, as in
the
manner of the European Court of Justice, gives its opinion on the interpretation of the Convention.[86]

It is suggested that the ideal approach would be to seek globally recognised principles on the basis
of
comparative analyses, as seen, for example, in the UNIDROIT Principles. However, whether the
solution is to be found in binding rules, or whether an international lex mercatoria is sufficient is in the
end a matter of legal policy, and not something on which a definitive answer is offered the present
context. Alternatively, the practice of the courts and the writings of legal theorists will work out the
principles on which the Convention, including Article 35, will be developed. This article can be seen as an example of this.[87]